An investigation into how MG Rover is being run is being planned by MPs after weeks of revelations in the newspaper about the financial structure of the business, the Daily Telegraph said.
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Martin O’Neill MP, who chairs the trade and industry select committee, told the Telegraph that the MPs would start an investigation within the next few months.
He reportedly said they would look at the structure of Phoenix Venture Holdings, MG Rover’s parent company, and the firm’s significance for the British car industry.
The Daily Telegraph said that MG Rover was bought from BMW by the Phoenix Consortium – four West Midlands businessmen – in April 2000. Phoenix paid £10 and received a £550 million “soft” loan from BMW.
In three years, deals and restructurings have made millions for the four who last year paid themselves £15 million, the newspaper said.
Helmut Panke, the finance director of BMW at the time of the sale, told the Telegraph: “If the impression is being given of a small group of individuals benefiting more than the entire workforce, then that is bad.”
Unions representing some of the 6,500 workers at Longbridge have criticised particularly a £13 million trust set up mainly for the benefit of Phoenix’s directors and families, the newspaper said.
The paper’s earlier reports had also highlighted the apparent financial separation of the profitable car finance operation from the car making side of the business.
A spokesman for Phoenix Venture Holdings told the Daily Telegraph: “The company has had no contact with the DTI or the select committee on this issue.”
